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What Do People On Here Think About "institutional Landlords"?

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I don't mean landlords that should be locked up in institutions (Rachmanism).

I mean big companies investing in building/buying rental properties on a large scale.

I actually think this could be really good for the private rented sector in the UK as unlike accidental landlords they would be more into managing their properties and acting responsibly as a proper business. Also, building properties specifically for renting might mean less of the shoeboxes and more family size homes since this is the new norm for many young families. I also think that any plan to add to the rental pool will be good if it prices out smaller, unscrupulous landlords who don't really want to fix things and are just in it for a quick buck and don't realise/care about their responsibilities.

Seems like this is going to be the future as there seem to be a lot of companies investing in the PRS now, especially pension fund providers who see that the PRS can make them money. If it works like social housing with longer tenancies and better properties but with higher rents it could be win-win as rents would eventually fall if enough new housing was built.

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I don't mean landlords that should be locked up in institutions (Rachmanism).

I mean big companies investing in building/buying rental properties on a large scale.

I actually think this could be really good for the private rented sector in the UK as unlike accidental landlords they would be more into managing their properties and acting responsibly as a proper business. Also, building properties specifically for renting might mean less of the shoeboxes and more family size homes since this is the new norm for many young families. I also think that any plan to add to the rental pool will be good if it prices out smaller, unscrupulous landlords who don't really want to fix things and are just in it for a quick buck and don't realise/care about their responsibilities.

Seems like this is going to be the future as there seem to be a lot of companies investing in the PRS now, especially pension fund providers who see that the PRS can make them money. If it works like social housing with longer tenancies and better properties but with higher rents it could be win-win as rents would eventually fall if enough new housing was built.

I think they have a competitive advantage over us all, and will borrow at near-zero rates, to extort the cr*p out of hardworking decent slaves.

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isn't the German rental market dominated by institutional landlords?

works well over there, along with long term leases.

Edited by Snagger

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Depends if they provide a reliable service or just an institutionalised version of the small-scale landlords and letting agents ripping tenants off with fees, failing to carry out repairs, messing around with deposits etc.

I'm pretty convinced that the small-scale landlord model doesn't work well though, way too many old misers in the game who are happy for their tenants to suffer so that they can scrimp another penny. Mine has a fit every 3 months or so when we report yet more problems with the 20+ year old boiler but will not pay for anything but a patch-up job. After almost 3 years of this we gave up and decided it's easier just to wait until we move out. We will now have to put up with about another 10 weeks of coldish showers until the end of our tenancy. When we start looking for the next place I'm going to make a beeline for the boiler on every viewing.

When you sign a tenancy agreement with a British small-scale landlord you have no idea whether or not they are going to undertake repairs during the tenancy, it's a complete gamble. At least with an institutional landlord they will get some kind of reputation via online reviews, word of mouth etc.

Edited by Dorkins

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I think they have a competitive advantage over us all, and will borrow at near-zero rates, to extort the cr*p out of hardworking decent slaves.

As another poster has said, the German market works because it is full of institutional investors (although they have much better rights for tenancy and tenure over there). However, they can only charge what the market is willing to pay and if institutional investors build hundreds of thousands of rental properties there will be a glut (as they will have all piled into the market). Would force rental prices down. The alternative would be for the rental market to remain mostly small scale landlords (many of whom are accidental) and don't really care about their obligations because they don't see themselves as businesses.

For example, my current landlord does not fix anything even though we have pointed out numerous problems. He is basically a completely absent landlord except when it comes to getting his rent. Institutional landlords would have a vested interest in fixing problems and keeping their stock in good order as their renters would be their business.

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I guess this is following developing REITS legislation, and I am in favour of it for the reasons already mentioned in this thread

Interesting that the big opal3 hall of residence in Leeds has gone bust

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I think the advantages mentioned above mean this could be a good thing. Certainly there are far too many BTL Scum about who don't consider it a business, just a cash cow.

I've had one really great private landlord, and numerous terrible ones.

One thing I do believe is that this is exactly the right time to draw up a proper legislation for the private rented sector. But all in, and with no geographical monopolies allowed to exist, I think it will make an improvement. It sickens me when I read about the Wilson's, Frisby's and assorted scumlords.

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About 9 years ago I rented a flat that turned out to be an institutional landlord. I didn't know until I got to see the lease agreement. I was In a rush to get somewhere as I was starting a new job. When I went to view the place it was an absolute tip. The letting agency, Countrywide, assured me that this was an administrative error and that the place would be place would be deep cleaned etc. in time to allow me to move in on the agreed date. It wasn't, and I couldn't move in for another week. The previous tenant had left owing money, and the debt collection guy turned up at my door looking for him. Getting anything done was a nightmare, as it was some employee at the owning company that had to approve all works. One night the cooker shorted and blew the fuse. I reported this, as I was expected to in the agreement. The guy came out, saw all the blackening where it had fused, but couldn't work out what the fault was. He reported 'no fault found' and I got the £78 bill as e landlord said I was now liable. They wouldn't budge on it and took it out of my deposit when I left. They also had a ridiculous lease renewal charge with the management company that I wasn't informed of at the outset.

I was a crap rental experience. I seem to remember it was L&G that owned the flat, but I am not sure.

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I've had extensive long-term experience with institutional landlords of commercial property and nothing from that leads me to believe things would be any better.

Typically they'll farm day to day running out to, often several layers, of third party management companies. Even where they don't management can be bonus driven to keep expenditure low. They will happily screw over tenants in this scenario and also to **** cover their own incompetence as required.

If you needed to take legal action against a small time BTL landlord or lettings agent in the small claims court you would have more chance of getting the result you wanted than with a large institutional, or their agents, who will have good legal representation on retainer.

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Not dis-similar to the old council house provision model.

As always it will depend on the model, the regulatory requirements/safeguards, where the profit ends up i.e. in pension returns or extracted by the usual layers of City rentiers, private equity etc etc like all other asset sell-offs, privatised cartels, PPI and all the other mechanisms for extracting rent from the population. Experience suggests sadly that the outcome won't be a good one for the tenants.

My guess is that over time most of these portfolios would end up owned by the Chinese and Arabs anyway, like everything else.

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I think it is a positive step.

I feel more empowered as a consumer when I buy a pair of socks than I do when I rent a house.

Largely because the companies who I buy socks from are:

i) competing in a true sock marketplace against other sock companies so want to protect their brand reputation

and

ii) well above the radar in terms of the regulatory system

Small-time landlord chancers are none of those things.

However, there is the risk that after several mergers and acquisitions and government backhanders, the institutional landlords end up as a Big Few with a virtual monopoly. Then we'll find the banks are our literal landlords.

Edited by ska_mna

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They also had a ridiculous lease renewal charge with the management company that I wasn't informed of at the outset.

If it's not in the tenancy agreement, it's not your problem.

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there is the risk that after several mergers and acquisitions and government backhanders, the institutional landlords end up as a Big Few with a virtual monopoly.

Fine by me, I get a much better service from Lidl than I have done from small time landlords.

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Couldn't be any worse. Could it?

I think there is a real opportunity here for the right company. Virgin House Hotels. The time will actually come when landlords have to compete for tenants, it will take this form eventually.

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As others have said, it depends on how effective the market is, vis a vis regulation and rentierism

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In countries with institutional landlords, there are actual tradesmen and quality fittings and buildings. A lot fewer things also go wrong. And of course not a profound rip off culture like in the uk.

I've had institutional landlords in Sweden. No problem. No doubt it would all go to sheit here :)

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To some extent this is already happening. For example these student housing organisations. If my town is anything to go by they are building a grand scale, not hoarding the existing stock.If they build new stock on a big enough scale, then it will have a beneficial impact.

Edited by aSecureTenant

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I'd much prefer to rent a home via a pension company, for example than an 'amateur' landlord. At least they will be in it for the long term. The people who run the property side of things will probably see tenants as their customers more than what Letting Agents and Landlords do as opposed to irritants (especially when reporting problems).

In a similar manner, I currently rent via a Housing Association. I'm a private tenant, not a social one, so I'm paying an extra £150-200 a month for the priviledge. It's nice to have a decent system in place for when repairs need doing (same process as social tenants). There is a Private Lettings Manager who keeps things in check.

I believe that my local authority are seeking to build 'market rent' homes (alongside social 'Council' ones) for those of us locked out of home ownership and too low a priority for their cheap rented housing. The need an investment vehicle for their staff pensions and this will introduce some competition to those Riggsby type landlords and hair gelled Lettings Agents. Bring it on, Ms Jones! :D

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Why would this be any different from existing large scale landlords, like the Wilsons (who are regarded as the offspring of Satan incarnate round here).

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Why would this be any different from existing large scale landlords, like the Wilsons (who are regarded as the offspring of Satan incarnate round here).

Investment criteria over a longer term

External diligence owing to diffuse ownership of the institution

De-personalisation of the letting agreement

Merit based institutional hierarchy instead of speculative timing based

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Investment criteria over a longer term

External diligence owing to diffuse ownership of the institution

De-personalisation of the letting agreement

Merit based institutional hierarchy instead of speculative timing based

I don't know what most of this means, and I don't know how the bits I do understand will make their tenants' experience any better. In both cases the landlords are investors seeking to make as much money as possible from their investment. If you feel unhappy about Mr Wilson getting rich through being a parasitic rentier, why does it feel any better when the parasites are "diffuse owners"?

I think there's some confusion. The Legal and General are not some sort of philanthropic co-operative not-for-profit housing association. Their motives are the same as Mr and Mrs Wilson.

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I don't know what most of this means, and I don't know how the bits I do understand will make their tenants' experience any better. In both cases the landlords are investors seeking to make as much money as possible from their investment. If you feel unhappy about Mr Wilson getting rich through being a parasitic rentier, why does it feel any better when the parasites are "diffuse owners"?

I think there's some confusion. The Legal and General are not some sort of philanthropic co-operative not-for-profit housing association. Their motives are the same as Mr and Mrs Wilson.

The institutions are talking about building, which sets them apart immediately from people hoovering up a local supply.

SNACR made a good post about possible downsides which deserves reading again.

L&G have a reputation to protect of course.

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I don't mean landlords that should be locked up in institutions (Rachmanism).

I mean big companies investing in building/buying rental properties on a large scale.

I actually think this could be really good for the private rented sector in the UK as unlike accidental landlords they would be more into managing their properties and acting responsibly as a proper business. Also, building properties specifically for renting might mean less of the shoeboxes and more family size homes since this is the new norm for many young families. I also think that any plan to add to the rental pool will be good if it prices out smaller, unscrupulous landlords who don't really want to fix things and are just in it for a quick buck and don't realise/care about their responsibilities.

Seems like this is going to be the future as there seem to be a lot of companies investing in the PRS now, especially pension fund providers who see that the PRS can make them money. If it works like social housing with longer tenancies and better properties but with higher rents it could be win-win as rents would eventually fall if enough new housing was built.

I think the discussion should be about whether the state should provide social housing or whether private institutions should. Will the cost benefits from innovation and efficiency that the private sector will provide outweigh the financial returns that the private sector will require from getting into the rental market? Trains, Electricity and water in private hands were supposed to provide cheaper and better services.

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